NEW YORK: Walmart Inc, the largest private-sector employer in the United States, is raising its starting wage 17% after a surge in inflation last year and heightened competition for workers.
The lowest initial wage will jump to US$14 (RM60) an hour from US$12 (RM51) next month, Walmart said in an email.
The hourly average will rise to US$17.50 (RM75), up 2.9% from the summer level and 6.7% more than in September 2021.
US consumer prices climbed 6.5% in December from a year earlier.
The increase will “ensure we have attractive pay in the markets we operate,” John Furner, the head of Walmart’s US operations, said in a message to employees.
Depending on the location, starting wages for new workers can range as high as US$19 (RM81).
The Bentonville, Arkansas-based company has been increasing wages and benefits in recent years, as retailers and other low-wage employers struggle to fill jobs.
Walmart’s pay rates often surpass those of discounters such as Dollar General Corp and Dollar Tree Inc.
However, its compensation for hourly workers typically trails that of rivals such as Target Corp, Costco Wholesale Corp and Amazon.com Inc.
Reports stated that the labour market is resilient with the rate of unemployment falling to a five-decade low of 3.5% in December with the number of job openings far outpacing the number of unemployed.
Applications for US unemployment benefits unexpectedly fell in the week ended Jan 14, sliding to the lowest level since September.
The four-week moving average in initial claims, which smooths out some of the week-to-week volatility, edged down to 206,000, the lowest since mid-May.
This has raised prospects that the Federal Reserve could further raise interest rates, putting further strain on minimum wage workers and household budgets.
Walmart’s increase in wages will be fuelled by regular annual pay raises and “targeted investments in starting rates for thousands of stores,” Furner said.
The pay bump will be reflected in March 2 paychecks, the company added.
Its new round of hikes came six months after it raised the average pay for pharmacy workers to more than US$20 (RM85) per hour and said it would offer more frequent and automatic pay raises as part of a new “progressive wage model” to fight labour shortages.
Furner said Walmart was creating new, higher-paying team lead jobs at its automobile-care centres.
The company is elevating tech positions at the centres to a higher pay scale “that reflects the special skills needed for the role and its importance to our business”.
Walmart is also adding new college degrees and certificates to its programme that pays tuition and fees for employees.
Earlier this month, the retailer said it was expanding an initiative to train supply-chain associates as truck drivers who can earn as much as US$110,000 (RM470,000) in their first year. — Bloomberg